United Bank of India may son merge into Union Bank of India owing to bad debts

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The United Bank of India that has already undergone lots of speculations owing to bad debts have now been expected to soon merge into Union Bank of India as depicted by the sources. This merger would be an act to bail out the bank against the bad debts that are expected to be about Rs. 8,546 crores. The above merger would take place as a part of capital infusion carried out by government.

The non-performing assets of United Bank of India grew abnormally under the chairmanship of Managing Director and Chairperson Archana Bhargawa. This merger has followed as a result of these NPAs. Though speculations are on about this merger, Union Bank CMD Mr. Arun Tiwari has completely denied any such possibilities. He has added that the government banks are quite stable and would stay. The merger has no possibility as depicted by him.

The United Bank of India had incurred the profit of Rs. 45 crore in the first quarter of the current fiscal year. Later on the bank registered the losses continuously for two quarters in the same year. This came out as huge amount going into bad debts.

The government holding in United Bank is 88% while that in Union Bank is 59%. The presence of Union Bank is Pan India while the United Bank is operational only in east. There is vast difference even in the share prices of both banks as Union Bank stocks are traded at Rs. 103 around the United Bank stocks being traded at Rs. 24.

The process for merger has already been started informally but any official approval for the same has not yet come out. The talks are on in the finance world but bank officials have yet not shown any sign of acceptance to this merger.

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